Forget Mt. Gox: Bitcoins Will Still Be Your Future Currency

Marc Andreessen-6
jdlasica/flickrMarc Andreessen is bullish on Bitcoin.

It's been a tough couple of weeks for Bitcoin.

Hackers have had their way with three Bitcoin sites that hold customer funds, and one, for all intents and purposes, has gone out of business. Poloniex had $50,000 of Bitcoin stolen; Flexcoin reported $600,000 in theft; and Mt. Gox -- the first and at one time, the largest exchange -- reportedly had $400 million stolen, which caused it to cease business and declare bankruptcy. This turmoil has sent the former golden child of hipster investors plummeting from the nosebleed heights of $1,242 per coin to a low of $419.

The virtual currency gods then poured salt into the wound when the Japanese government announced that it intended to regulate Bitcoin -- a move that foreshadows similar actions by regulators in North America and the European Union. The dark cloud hanging over the currency got a bit darker -- reminding us that though the currency is virtual, the people behind it are real -- when it was announced that Autumn Radtke, CEO of bitcoin exchange First Meta, committed suicide at the age of 28.

So why hasn't Bitcoin failed once and for all? The answer doesn't have to do so much with what is happening now with the currency as it does with who is betting big on its success.

Follow the Leaders: Marc Andreessen and Fred Wilson

Allow me to introduce you to two people who think Bitcoin is just in its infancy, and whose opinions you should pay attention to: Marc Andreessen and Fred Wilson.

You might recognize Andreessen as the co-creator of the first web browser -- Mosaic -- and co-founder of Netscape Communications, which was purchased by AOL (AOL) (publisher of DailyFinance) in 1999 for $4.2 billion. After that, he went on to form Andreessen Horowitz, one of the premier Silicon Valley venture capital firms, which was an early investor in such obscure start-ups as Facebook (FB), Twitter (TWTR), Groupon (GRPN) and Zynga (ZNGA).

You might not recognize Fred Wilson, but his support of bitcoin may be even more prescient. Wilson is an outlier in the VC world, shunning the West Coast and headquartering in New York City. Even odder in the world of angel investors, where secrecy is the name of the game, Wilson writes a popular and widely read blog, AVC.

Wilson, too, has an uncanny knack of getting in on the ground floor of tech companies before they become household names. Through his company, Union Square Ventures, he and his partners have invested in Zynga, Tumblr, Kickstarter, Twitter, Foursquare, Etsy and a little company called Coinbase.

A Virtual Wallet Could Be the Killer App

Coinbase provides a virtual wallet for you to carry your Bitcoins and offers a platform where merchants and consumers can transact business in the new digital currency. And if that just made a little bell in your head go off, you might be thinking the same thing I am.

I don't claim to be an expert in Bitcoin. Nor do I know what trajectory will take Bitcoin out of its current troubles and into the hearts, minds and pocketbooks of every citizen of the world. But I do know that when very smart people put their money where their mouths are, we should all pay attention.

%VIRTUAL-article-sponsoredlinks%Andreessen, whose company has invested millions in Bitcoin-related businesses, equates the recent problems with similar transitory events in futures and commodities. "This is like MF Global, not some huge breakdown of the underlying technology or other exchanges," he told CNBC. "Bitcoin protocol is unchanged, and other exchanges and companies are doing fine."

Wilson went further, announcing on his blog that he personally bought more Bitcoins on the day Mt. Gox went out of business.

Technology moves so fast these days that those of us who don't live, breath and drink it on a daily basis often can't see the virtual forest for the trees. So before you dismiss Bitcoin as a fad or a case of technology run amok, take a minute to see who is championing it and what their track record is in successfully envisioning the future.

No man is an island, or even a peninsula, so I encourage your feedback in the comments below. And don't forget to pick up my book, "Trading: The Best of the Best -- Top Trading Tips for Our Time."

Why it's Easier to Rob Bitcoins Than Banks
Why it's Easier to Rob Bitcoins Than Banks
Originally published